Remuneration policies, defined in compliance with the Company’s governance model, as well as with the recommendations contained in article 5 of the Corporate Governance Code, pursue the general goal of attracting, retaining and motivating individuals useful for the development of the Group, recognising the responsibilities assigned to them, and guiding their actions towards the achievement of company objectives, rewarding the results obtained.
More specifically, these policies contribute to aligning the interests of management with the - priority - objective of ensuring the sustainable success of the Company, by increasing value for Shareholders in the medium/long term, taking into account the interests of stakeholders, and make it possible to achieve sustainable and stable results in the short and long term in line with the Business Plan, in which the ESG (Environment, Social and Governance) aspects are integrated, to implement adequate retention of strategic positions for governance and business and, in general, to pursue the vision, mission and corporate values.
Furthermore, the long-term interests of the Company and the Group's risk management policy are an integral part of the Group's internal control and risk management system (which is illustrated in the Report on Corporate Governance and Ownership Structures pursuant to article 123-bis Consolidated Law on Finance), in accordance with which the Remuneration Policy was prepared. In order to monitor these aspects, the choice has been made to hold a joint meeting between the Remuneration and Appointments Committee and the Control, Risk and Sustainability Committee of IREN S.p.A. for 2022 to examine, in compliance with the functions and prerogatives of their respective competences, the 2022 Guidelines, prior to the resolutions for which the Company's administrative body is responsible.
In terms of remuneration policies, the short-term incentive system for the IREN Chief Executive Officer and General Manager, the IREN Group Senior Executives with Strategic Responsibilities, as well as for additional resources who can contribute significantly to the achievement of the Group's budget objectives, represents a tool intended to differentiate excellent performance without any form of automatic recognition and not linked to the achievement of assigned objectives and, in each case, pursues the goal of:
- allowing performance to be assessed on quantitative and qualitative variables with a direct link to the Company's performance, as well as to its strategic objectives and sustainable success, in line with the Company's risk management policy;
- guaranteeing that the variable component, with respect to the fixed component, creates an incentive and is significant;
- avoiding the creation of excessively complex mechanisms, difficult to communicate and manage;
- selectively guiding individual performance, while also guaranteeing the achievement of Group and company goals.
The long-term variable remuneration component - confirmed for the entire duration of the Business Plan, as a sequential succession of closed, monetary plans, subject to Regulations to be reviewed at the beginning of each three-year period, for Directors holding special offices within IREN - without prejudice to what will be specified below -, for IREN Group Senior Executives with Strategic Responsibilities, as well as for other resources that can make a significant contribution to achieving the objectives of the Group's 2030 Business Plan, pursues the objective of:
- stimulating the ability to create value for the Group, rewarding the achievement of industrial, strategic and business objectives;
- guaranteeing the achievement of economic-financial and ESG objectives in the context of medium/long-term sustainability;
- strengthening the motivation of the relative beneficiaries in pursuing the strategic objectives set out in the Business Plan, aligning their interests with those of stakeholders (Shareholders, customers, employees, etc.);
- attracting and motivating employees, rewarding the achievement of results and a culture of performance, as well as virtuous behaviours implemented to achieve the same;
- developing and strengthening retention policies for key company resources, making it possible to increase their sense of belonging and create incentives for them to remain with the IREN Group;
- ensuring that the pay-mix (relative weights of fixed remuneration, short-term and long-term variable remuneration) is in line with market practices, without prejudice to the principle of sobriety which characterises the Company.
With regard to the non-executive Directors and the members of the Board of Statutory Auditors, the objective of the policies is to make available to the Shareholders all the elements that enable them to adopt the measures that pertain to them, by defining, in the appropriate venues, remuneration that is appropriate to the competence, professionalism and commitment required by the tasks assigned to them, as well as to the size and sector characteristics of the Company and its situation.
The process of developing the 2022 Guidelines also took into account:
- resolutions made on the issue of compensation by the Directors, adopted by the Shareholders' Meeting on 22 May 2019, in particular the principles of the comprehensive nature of remuneration and the obligation to pay back employees and of amounts established as compensation for Directors with special offices within IREN (see that detailed herein);
- the indications expressed by public Shareholders regarding the positions appointed by them pursuant to current Shareholders’ agreements;
- the overall significance of positions and roles examined;
- the results of the remuneration benchmarking carried out in 2021 by the Remuneration and Appointments Committee, with reference to the remuneration of the non-executive Directors and the members of the internal committees (with the support of the advisor The European House - Ambrosetti);
- the expiry of the term of office of IREN's Board of Directors with the approval of the financial statements as at 31 December 2021.
Requests from the market and institutional investors relative to top management remuneration policies were taken into account, as well as best practices on the market, through:
- in-depth analysis of the outcome of the Shareholders' Meeting vote on the Report on the 2021 Remuneration Policy and on the compensation paid for 2020 submitted to the Shareholders' Meeting held on 6 May 2021;
- an examination of the issues of attention raised by the Chairperson of the Corporate Governance Committee in the letter sent in December 2021 to the competent bodies of Italian listed companies, a letter which, once again, with reference to remuneration policies, invited issuers to (i) improve said policies by defining clear and measurable rules for the payment of the variable component and any end-of-office indemnity (ii) adequately consider the consistency of the parameters identified for the variable remuneration with the strategic objectives of the business activity and the pursuit of sustainable success, assessing, if necessary, the provision of non-financial parameters, which are always predetermined and measurable;
- an in-depth study of this as part of the annual self-assessment activity of the Board of Directors and its Committees.